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In a period marked by instability, there is considerable comfort in hanging out with old money and its reassuringly long-term view. So I called up David Harris, the chief investment officer at Rockefeller Financial, and asked him to meet me in the lobby of the New York Palace Hotel. I have always found the permanence of all that lobby marble oddly calming.

Rockefeller, with $35 billion under its hood, is particularly good at analyzing multinationals and global stocks. In a debt-laden world where even the U.S. has been downgraded, Harris is of the school that believes AAA-rated firms sitting on "unprecedented" amounts of cash are the "new sovereigns."

Harris, in short, has a fine mind for looking at old and established companies in new ways. "If you look at a world awash in debt, ask yourself, 'Who [or what] is really the source of strength?' " (For a list of cash-rich tech firms, see "Show Us the Money," Barron's, May 28, 2012.)

We talked strategy with Rockefeller Financial while surrounded by the timeless marble of the New York Palace Hotel.
Matthew Eisman/Getty Images

Not so, countered Harris. What you are seeing in the balance sheets of these global companies is a unique historical period when "the scaling of technology" has enabled firms to generate cash at an "unprecedented" rate in comparison with the number of employees they have. "Yes, you need physical plant and employees, but nothing on the scale that you needed in the past to become one of the largest companies in the world," he says.

Furthermore, says Harris, the corporate cash piles are "bigger than anything seen in the past because overseas markets have become more important than they ever were before, so the amount of cash they've built up overseas is tremendous." Diving into the presidential debate, Harris argues that corporate-tax law has "conditioned CFOs and treasurers to keep cash offshore."

U.S. companies pay taxes abroad and then pay taxes again when overseas profits are brought back home. This double taxation encourages firms to leave their profits overseas, which is why there is a clamor to resurrect the 2004 repatriation tax holiday that briefly allowed companies to bring profits back at an effective 5.25% tax rate, versus the corporate tax rate of 35%.

According to the IRS, only 842 of the 9,700 firms with foreign subsidiaries repatriated $362 billion during the 2004 tax holiday. "The evidence clearly shows that these repatriated earnings did not increase domestic investment, job creation, or research and development," the Heritage Foundation concluded, but "estimates indicate that a $1 increase in repatriations was associated with a 60 cents-to-92 cents increase in payouts to shareholders -- despite regulations stating that such expenditures were not a permitted use of repatriations qualifying for the tax holiday." Michael Mundaca, former assistant Treasury secretary for tax policy, warned that this discussion of a repatriation tax holiday is a distracting sideshow from the comprehensive tax reform the nation desperately needs.

Harris' point is that the bloated cash positions of U.S. companies are partly influenced by the mere discussion that a tax holiday could be in the cards under a Romney administration. CFOs and treasurers are specifically watching how the election plays out in the White House, Senate, and House; the results will let them "handicap it all -- do I keep my cash offshore and bring it back next year?" Or whatever.